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Welcome

Encina Private Credit partners with direct lenders to provide $15 - $150mm first-out enterprise-value loans as part of a unitranche solution to PE-sponsored and non-sponsored borrowers (for single deals and cross-collateralized portfolios).

What we do

  • First-out, enterprise value loans (EBITDA- and ARR-based underwriting).
  • Value proposition to direct lenders – speed, certainty, flexibility, reliability and no conflicts—customized first-out structures executed quickly alongside your team.

Target deal parameters

  • Product set – $15 – 150mm first-out enterprise value loans that can be underwritten based on cash flow or annualized recurring revenue (for software and other recurring-revenue businesses).
  • Structure – may include a combination of revolver, funded term loan and delayed draw term loan.
  • Tenor – generally ≤ 6 years.
  • Attachment point – generally <2.5x EBITDA (or <1.25x ARR on recurring‑revenue deals) and <35% LTV.
  • Minimum EBITDA – $15mm for PE-sponsored borrowers and $20mm for non-sponsored borrowers.
  • Industry agnostic — open to most industries so long as a prospective borrower has a defensible business model.

Use cases for direct lenders

  • New potential investment opportunities – increase ability to win deal, size constraints, offload revolver, and enhance yield on last-out position.
  • Existing portfolio company investments – defend incumbent positions against refinancings, add-on acquisitions, growth CAPX, enhance yield on last-out position, free up funds to redeploy or return to LPs, and DIP/exit facilities.
  • Cross-collateralized facilities — yield enhancement, ability to do larger deals, free up funds to redeploy or return to LPs, manage fluctuations in revolver usage, and L/C administration.

Benefits for Our Direct Lending Partners

Customer Focused

Capable & Reliable

Efficient

Customer Focused

  • Flexible

    As a non-bank specialty finance company, EPC is not subject to leveraged lending guidelines. We are less sensitive to the total leverage ratio of a given borrower and whether a direct lender’s term loan is structured as covenant-lite.
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    Flexible

    As a non-bank specialty finance company, EPC is not subject to leveraged lending guidelines. We are less sensitive to the total leverage ratio of a given borrower and whether a direct lender’s term loan is structured as covenant-lite.

  • Enhance Yield

    We can take a portion of first-out term loan at a compressed yield in order to enhance the direct lender’s yield on its last-out position.
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    Enhance Yield

    We can take a portion of first-out term loan at a compressed yield in order to enhance the direct lender’s yield on its last-out position.

  • Buyout Option

    If necessary on a given transaction, the direct lender may purchase our first-out position at par plus accrued interest (no prepayment penalty) on short notice.
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    Buyout Option

    If necessary on a given transaction, the direct lender may purchase our first-out position at par plus accrued interest (no prepayment penalty) on short notice.

Capable & Reliable

  • Reduce Operational Burden

    We take on the contingent funding obligation and the operations headache associated with the revolver while the direct lender can focus on deploying fully-funded term loans.
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    Reduce Operational Burden

    We take on the contingent funding obligation and the operations headache associated with the revolver while the direct lender can focus on deploying fully-funded term loans.

  • Scalable

    We can commit up to $150mm on a single transaction, which enables us to scale our first-out facilities over time as a given borrower grows and eliminates the need for a first-out partner on most opportunities.
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    Scalable

    We can commit up to $150mm on a single transaction, which enables us to scale our first-out facilities over time as a given borrower grows and eliminates the need for a first-out partner on most opportunities.

  • Patient & Stable Capital

    We have structured the platform so that we can take a patient buy-and-hold approach that is less impacted by regulatory changes or disruption in the broader capital markets.
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    Patient & Stable Capital

    We have structured the platform so that we can take a patient buy-and-hold approach that is less impacted by regulatory changes or disruption in the broader capital markets.

Efficient

  • Speed

    We seek to provide a “read” on any given opportunity within 48 hours and move rapidly through approval and documentation. We have designed our process to be consistent and predictable. We believe strongly that a first-out lender should not be the bottleneck in regards to a transaction closing. Most of our team members have worked together for many years at other major financial institutions and are accustomed to delivering within tight timeframes.
    Copied
    Speed

    We seek to provide a “read” on any given opportunity within 48 hours and move rapidly through approval and documentation. We have designed our process to be consistent and predictable. We believe strongly that a first-out lender should not be the bottleneck in regards to a transaction closing. Most of our team members have worked together for many years at other major financial institutions and are accustomed to delivering within tight timeframes.

  • Programmatic Approach

    Our objective is to establish programmatic arrangements with direct lenders and sponsors by negotiating a master Agreement Among Lenders once and then using the same form for each subsequent transaction.
    Copied
    Programmatic Approach

    Our objective is to establish programmatic arrangements with direct lenders and sponsors by negotiating a master Agreement Among Lenders once and then using the same form for each subsequent transaction.